Globalization and a High-Tech Economy California, the United States

High-technology and globalization are arguably the two most important forces driving the US economy today. This book analyzes how they interact and the implications of that interaction. The methodology applies data and statistical analysis to determine th

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Globalization and a High-Tech Economy: California‚ the United States and Beyond

by

Ashok Deo Bardhan Dwight M. Jaffee Cynthia A. Kroll Haas School of Business‚ University of California

KLUWER ACADEMIC PUBLISHERS NEW YORK, BOSTON, DORDRECHT, LONDON, MOSCOW

eBook ISBN: Print ISBN:

0-306-48743-8 0-7923-7317-0

©2004 Springer Science + Business Media, Inc. Print ©2003 Kluwer Academic Publishers Dordrecht All rights reserved No part of this eBook may be reproduced or transmitted in any form or by any means, electronic, mechanical, recording, or otherwise, without written consent from the Publisher Created in the United States of America

Visit Springer's eBookstore at: and the Springer Global Website Online at:

http://www.ebooks.kluweronline.com http://www.springeronline.com

Dedication

To our spouses‚ Arden Hall‚ Lynne LaMarca Heinrich‚ and Raka Ray with appreciation for help and patience.

Contents

Dedication

v

Acknowledgements

xiii

Preface

xv

1: Introduction

1

2: Globalization and a High-Tech Economy

19

3: International Trade and California Industry

53

4: Foreign Outsourcing and Domestic Industry

91

5: Intra-Firm Trade and Intermediate Inputs

115

6: International Networks and High-Tech Exports

131

7: Global Linkages‚ the High-Tech Sector‚ and State Policy Choices

147

8: Conclusions

177

References

183

Subject Index

199

Author Index

205

viii

Figures and Tables

Figure 1-1. Percent of Workers in Selected Managerial‚ Professional or Technical Professions‚ 2000. 7 Figure 1-2. Patents Awarded by Industry‚ 1999. 7 Figure 1-3. Percent of Workers in Selected Managerial‚ Professional or Technical Professions‚ 2000. 8 Figure 1-4. Agglomeration of US Computer Manufacturing Employment‚ 2000. 8 Figure 1-5. Worldwide Locations of Production and R&D Facilities of California Computer Firms. 9 Figure 2-1. Annual US Shipments‚ High-Tech Manufacturing. 25 Figure 2-2. Annual Activity‚ US High-Tech Manufacturing and Services. 25 Figure 2-3. US Producer Prices (Quality Adjusted) for High-Tech Manufactured Products. 26 Figure 2-4. US Employment for High-Tech Manufacturing and Services. 28 Figure 2-5. US Average Annual Worker Productivity‚ High-Tech Manufacturing and Services. 28 Figure 2-6. US International Trade‚ Computers and Peripherals (NAICS 3341). 30 Figure 2-7. US International Trade‚ Semiconductors and Related Manufacturing (NAICS 3344). 30 Figure 2-8. US International Trade Balances‚ High-Tech Services. 32 Figure 2-9. US International Trade Balances‚ High-Tech Manufacturing and Services. 32 Figure 2-10. Employment Location Quotients for 4-Digit NAICS Codes With the Largest Employment in Santa Clara Country. 39

ix

Figure 2-11. Shipments for California High-Tech Manufacturing 40 Figure 2-12. California Employment in High-Tech Industries 40 Figure 2-13. California Average Worker Productivity‚ High-Tech Manufacturing 42 Figure 2-14. Imports and Exports Through California Ports‚ as Percent of US Total 42 Figure 3-1. Stage I—Export Base 54 Figure 3-2. Stage II—Supply-Side Driven Foreign Produc